The Consumer Financial Protection Bureau (CFPB) announced this week that it has rescinded several regulatory relief provisions put in place under the leadership of Former Director Kathleen Kraninger and the Donald Trump administration to more closely align with the use of its authority as defined in its founding legislation.
In total, seven policy statements have been rescinded by order of Acting CFPB Director Dave Uejio, which allowed temporary flexibilities to financial institutions during the COVID-19 coronavirus pandemic in the realms of consumer financial markets including mortgages, credit reporting, credit cards and prepaid cards. All of the rescissions are in effect as of April 1, 2020.
“We are now over a year into the disruptive and deadly COVID-19 crisis. The virus has affected industry as well as consumers, but individuals and families have been hardest-hit by the pandemic’s health and economic impacts,” said CFPB Acting Director Dave Uejio in a statement. “Providing regulatory flexibility to companies should not come at the expense of consumers. Because many financial institutions have developed more robust remote capabilities and demonstrated improved operations, it is no longer prudent to maintain these flexibilities. The CFPB’s first priority, today and always, is protecting consumers from harm.”
Rescissions with relevance to the reverse mortgage industry include ending a postponement on some data collections from industry on Bureau-related rules, and ending changes to its supervisory activities to account for operational challenges at the companies it is charged with regulating. Both of these provisions were announced with the first wave of COVID-19 financial institution relief publicized by the Bureau on March 26, 2020.
This latest action follows from other recent rescissions designed to roll back or eliminate certain financial regulatory policies of the previous administration, including the recent termination of a January 24, 2020 policy statement regarding prohibition on abusive acts or practices, in order to “better protect consumers and the marketplace from abusive acts or practices, and to enforce the law as Congress wrote it,” the CFPB said in its justification of that action.
Acting Director Uejio is serving in the leadership position at the CFPB while President Joe Biden’s full-time nominee, Federal Trade Commissioner Rohit Chopra, is undergoing the U.S. Senate confirmation process. However, Chopra may see his confirmation delayed due to vacancies that exist at the Federal Trade Commission (FTC), according to recent reporting.
While Chopra awaits confirmation, Acting Director Uejio has vowed to be an active leader at the Bureau while he stands in the interim position, and has taken a number of positions to make good on this statement, including greater scrutiny of mortgage servicers in instances of possible consumer abuse.
Read the rescission announcement at the CFPB Newsroom.